Wheat, Corn Prices Fall on Oversupply Fears

NEW YORK (TheStreet) -- A weak dollar was unable to bolster wheat and corn futures Thursday as concerns the market would soon be flooded with supplies prevailed.

The U.S. dollar index was down 0.4% to $73.05, which would normally bolster wheat and corn futures by increasing overseas buying power, but wheat for July delivery was tumbling 2.6% to $7.90 3/4 a bushel. Wheat was one of the biggest commodity laggards Tuesday. Meanwhile, corn for July delivery was behind 1.2% to $7.50 ¼ a bushel.

Prices came under pressure on Russia and Ukraine supply concerns.

"Although there have been muted concerns about the development of wheat crops in the Black Sea region, the trade is concerned that Russia and the Ukraine will be offering new crop wheat to the global market," according to a Benson Quinn Commodities note.

Russia is planning to re-enter the export market after banning exports since last August as they conserved the grain during their own wheat drought. However, Russia has indicated that it will not return to the export market until at least July, when the country has greater clarity about new crop production potential. This, as Ukraine lifts its corn export quota this week.

"Based on the current forecast, key wheat growing areas of China are expected to receive some relief in the form of rain," the Benson Quinn report added. In the U.S., major crop damage is not expected from rising temperatures in eastern Colorado and parts of Nebraska, while the northern plains and Canadian prairies are expected to remain wet, according to the broker.

Wheat plays were trading mixed. Wheat processor Archer Daniels Midland(ADM_) was flat at $36.29, brewer Boston Beer(SAM_) was trading sideways at $94.78 and food giantGeneral Mills(GIS_) was down 0.2% to $38.46. General Mills peer Kellogg(K_) was rising 0.3% to $56.53.

Farm equipment manufacturer Deere(DE_) was losing 0.4% to $96.33, fertilizer companyMosaic(MOS_) was falling 1% to $75.04 and Mosaic peer CF Industries(CF_) was rising 1.7% to $141.74.

(Source: http://www.thestreet.com/story/11098288/1/wheat-corn-prices-fall-on-oversupply-fears.html)